Northeast Ohio's energy efficiency roadmap: now and the future

For some time now, there has been a lot of excitement about the energy efficiency sector in Ohio and its potential to drive economic growth. But until a detailed asset inventory was recently completed, the extent and impact of the sector was not clear. The lack of detailed insight into the sector made it difficult to identify and prioritize opportunities for growth. Now we are armed with a clear picture of what we have in Ohio and Northeast Ohio upon which we can build.

The rationale for taking a closer look at our energy efficiency assets was highlighted in the June 5th blog “Energy Efficiency: Maximizing Ohio's Competitive Advantage,”. Although overall U.S. energy demand has fallen slightly over the past two years, the demand for energy efficient products and services has actually increased. Pike Research estimates that the energy efficient retrofits market for commercial and public buildings alone will grow from $80.3 billion in 2011 to $151.8 billion in 2020.Likewise, the energy efficient housing category will increase from a $14 billion dollar market in 2012 to an $84 billion market in 2020. Between market demand, the duty to respect environmental impact, and reduced budgets, the need to fully understand our energy efficiency ecosystem, as well as knowing where to focus in order to make future economic impacts, has become of utmost importance.

Earlier in the year, NorTech and Advanced Energy Economy Ohio (AEE Ohio) partnered to catalog all of the energy efficiency sector's assets in Ohio. The purpose behind the effort was to concretely identify the companies and research already engaged in the energy efficiency sector as a basis for future growth. The results of the project have been enlightening. The asset inventory revealed over 400 companies and organizations in Ohio that are working on the development, manufacture and applicability of energy efficiency products, materials, services, and components in 48 distinct technology systems across 13 categories. These companies collectively generate $2 billion in revenue annually within Ohio. Click here to view the full report available on the AEE Ohio website.

Nick Bush outlined the overall results of the asset inventory across the state and provided a summary of the region by region strengths. Specifically for Northeast Ohio, the inventory results begin to tell the story of our dynamic energy efficiency sector in the region, including:

• 218 companies & organizations

• 3,940 employees

• $1.02 billion in annual revenue

This is quite impressive and indicates that the region is responsible for over half of the state's revenue in energy efficiency. Specifically, the segments of critical mass that were identified as a priority in Northeast Ohio include:

• Lighting: Over 30 assets, both solid state and non-solid state technologies, anchored by GE Lighting, Advanced Lighting Technologies Inc. and LSI Industries

• Waste Heat Recovery: Echogen Power Systems and Babcock & Wilcox Company are two examples of the 25 assets in this segment

Several key points were discussed last week by our panel at the Advanced Energy B2B Conference and Expo 2012. Steve Caminati remarked that the detailed inventory of companies and commercial activity in the state will be an important tool for framing and advocating appropriate policies to encourage growth in our energy efficiency sector. One idea that is currently being discussed is the concept of On-Bill Repayment, which enables residential ratepayers to finance energy efficiency improvements to their home and repay the loan through payments to their utility on their monthly bill. The idea is that the energy savings can offset the expense of the loan payments. The arrangement should also make financing for such projects more readily available and easier for ratepayers.

Financing was a key focus of the panel discussion. All of the panelists agreed that innovations in financing alternatives will be critical to drive significant growth in the sector in Ohio. Andy Holzhauser is gaining traction in Greater Cincinnati by combining public funds with private sector dollars to increase the available pool of capital for residential energy efficiency projects and achieve terms very attractive to homeowners. However, he remarked that much more can be done and needs to be done in the financing arena. This will continue to be a focus for Greater Cincinnati Energy Alliance. He also commented that the asset inventory will be a useful tool to build additional support for his efforts.

Another key point was the opportunity to connect the service providers conducting audits and recommending energy efficiency projects with the manufacturers of the products and materials that are needed for the projects. By more effectively connecting the supply of products and materials from Ohio companies to projects being implemented in Ohio, we can leverage even more economic impact for our state.

I commented on plans in Northeast Ohio to continue the roadmapping process to its conclusion. From the beginning of this initiative, NorTech's intent has been to take the asset inventory data and develop a complete energy efficiency roadmap for Northeast Ohio, utilizing InSeven℠, our proven roadmapping process. This involves key additional steps beyond the asset inventory itself. These steps include projecting the market opportunity over the next seven years, assessing the region's competitive position, developing a vision and goals for each of the priority segments and gathering stakeholder feedback. The full roadmapping process will be finished by year-end and will result in a completed roadmap with an appropriate action plan for the region.

Understanding what the entire state has to offer has set the stage for NorTech and other economic development organizations to hone in on those proficiencies that are distinctive in each region. The asset inventory enables opportunities for economic development organizations in each region to take this insight and develop plans of action to leverage their regional strengths to stimulate growth and job creation. Stay tuned for the results of the Northeast Ohio roadmap to be rolled out by the end of the year.

DAVE KARPINSKI

Dave Karpinski is Vice President of NorTech and Director of NorTech Energy Enterprise. He leads the organizations efforts to accelerate economic growth in Northeast Ohio's advanced energy industry and has over 20 years of private sector experience in a variety of manufacturing-related industries.